I write about the Internet technologies and upstarts that are disrupting advertising and media faster than ever. I'm living this disruption, so I might as well write about it, too. I spent nine years as chief of BusinessWeek's Silicon Valley bureau writing about the leading edge of technology and business, and I continue to do so for a variety of publications. Follow my posts here by clicking the "+ Follow" link under my name. You can also find me at my personal Web site RobHof.com, follow me on Twitter (robhof), Circle me on Google+, subscribe to me on Facebook, and email me (robert.hof@gmail.com).

The search giant earned a profit before certain costs such as stock compensation of $10.74 a share on a 12% rise in revenues, to $14.89 billion. Net income was nearly $3 billion, or $8.75 a share.

Google’s shares were rising fast, by more than 6%, in extended trading immediately after the earnings announcement. The stock had fallen about 1%, to $889, in today’s trading.

Analysts had expected earnings before certain costs such as stock compensation to rise 15% from a year ago, to $10.35 a share. Net revenues were expected to rise 5%, to $11.9 billion (gross revenues of $14.8 billion), a big slowdown from even a quarter ago.

Ad prices, measured by cost per click, fell 8% from a year ago and 4% from the last quarter. In the second quarter, prices had fallen 6%, so if anything, the price declines are rising. Paid clicks rose 26% from a year ago and 8% from the second quarter.

The bottom line is that while ad prices continue to decline, that decline is offset considerably by more people clicking on the ads. “Clicks were up much more significantly than we expected,” Roger Barnette, president of search marketing firm IgnitionOne, said in an interview. However, 12% revenue growth is down yet again, the fourth straight quarter of declining sales, which were up 31% as recently as the first quarter.

Mobile ad prices were the key concern for investors. Because they sell for at least a third less than desktop ads, they’ve dragged down Google’s overall ad prices for the last several quarters. That has contributed to a steady slowing of revenue growth, to 19% in the second quarter.

Google took a big and controversial step toward fixing that mobile ad pricing problem in February with what it calls “enhanced campaigns,” the results of which investors were keenly interested. In the name of simplicity, the move essentially forced advertisers to buy ads for tablets and desktop computers together, not separately as they could before. Since tablet prices were much lower, many advertisers bid just on them as a way to cut the overall cost of a campaign. Google also decides whether ads will run on mobile phones or elsewhere, but advertisers can’t choose to run ads only on smartphones or only on tablets.

According to a number of firms that help agencies and marketers place Google ads, prices for ads that end up on tablets have indeed risen, but it wasn’t clear how much impact that has had on Google’s ad prices overall. While analysts at first expected a significant change, some have since downplayed the impact.

However, Barnette said they are indeed affecting the advertisers who are using them. The larger, more sophisticated clients IgnitionOne works with, which use enhanced campaigns more actively, actually saw cost per click rise 9% in the third quarter.

Investors may finally be warming to Google’s longtime insistence that they shouldn’t fixate on ad prices, rather that they should be considered along with the number of clicks, says Larry Kim, founder and chief technology officer at search marketing firm WordStream.

Google’s chief challenge, he says, is getting more advertisers to try mobile advertising, especially features such as the ability to schedule them locally when people are likely to be receptive. Kim says only one in five of WordStream’s advertisers run campaigns that are intended chiefly for mobile devices. Though that’s way up from 1 in 20 awhile ago, it’s still a small minority. “It’s a tough nut to crack” to get advertisers to spend extra time to do mobile ads right, he says. But he thinks eventually advertisers will realize mobile clicks are worth more–for example, a click-to-call is much more valuable to a business than a visit to its website.

Google’s Motorola unit continued to lose big bucks–$248 million, up from $192 million a year ago and $218 million in the second quarter. Motorola made a big splash with the new Moto X smartphone introduced Aug. 1. Google apparently spent a lot of money to market it.

“Google had another strong quarter with $14.9 billion in revenue and great product progress,” CEO Larry Page said in a customarily content-free statement. “We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device.”

More details will be available in the earnings conference call that begins at 1:30 p.m. Pacific. I’ll write up the highlights of the call as they happen here. You can also hear it on YouTube and check out the full financial materials.

The call is underway, with Page, Chief Business Officer Nikesh Arora, and CFO Patrick Pichette.

Page starts out calling out the multi-screen trend, which Android is helping to lead. He says he’s also tremendously excited by Google’s Chromebook computers, such as the new HP model introduced a couple weeks ago.

Then there’s the Moto X. He says CEO Dennis Woodside and the team have revamped products, with distribution soon to come.

Not least, he calls out Chromecast, the little device that allows you to beam material from your mobile device to the TV. YouTube now gets 40% of its traffic from mobile, up from just 6% two years ago.

Maps get a shout-out as well, along with a new search interface for mobile, including voice search.

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